Welspun Enterprises shares gained as much as 15 per cent in the early trade on Wednesday after the company informed BSE before market hours that it has entered into a definitive agreement with India Infrastructure Fund-II, an alternate fund sponsored by IDFC to sold 37 per cent equity stake in Dewas Bhopal Corridor (DBCL), a 50 per cent joint venture of the company at an enterprise value of Rs 662 crore (including a contingent deferred consideration of Rs 34 crore million and debt of Rs 317 crore).
At 9.35 am, Welspun Enterprises shares were trading 9.86 per cent up at Rs 56.85. The scrip opened at Rs 55.10 and had touched a high and low of Rs 59.40 and Rs 55.10, respectively, in trade so far. Later, the scrip settled 12.17 per cent up at Rs 58.05.
In a BSE filing the company said, “The transaction has strengthened the company’s financial capabilities by increasing the cash and reducing net debt by nearly Rs 282 crore.”
Consequently, the company still owns 13 per cent equity stake in DBCL, which can be transferred within 2 years, subject to approval of Madhya Pradesh Road Development Corporation (MPRDC). Ernst and Young acted as advisor for DBCL.
Welspun Enterprises (WEL), formerly Welspun Projects, part of the Welspun Group, is an operating company as well as a holding company in the business of Infrastructure, Oil & Gas Exploration and Renewable Energy.
In the past one year, Welspun Enterprises shares surged 84.82 per cent to Rs 51.75 on December 22. On the other hand, Sensex fell 7.62 per cent during the same period.
For the quarter ended, September 30, 2015, the company posted a consolidated net profit of Rs 1.32 crore, up 122.60 per cent, against net loss of Rs 5.84 crore in the corresponding quarter a year ago.